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Hospital Finance

Out Of The Frying Pan: New York City Hospitals In An Age Of Deregulation

For several decades New York City hospitals had been distinguished by their tightly regulated environment, chronically weak finances, high occupancy rates, teaching intensity, dependency on public payers, low managed care penetration, and minimal merger activity. Then in the late 1990s a rapid convergence of forces—the Balanced Budget Act, managed care growth, state deregulation of commercial rates, escalating costs, and plunging hospital occupancy rates—threw the city’s hospital industry into turmoil. In this paper we describe this period of turbulent change that has left most of the city’s safety-net and small community hospitals near bankruptcy.

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